May 1/06 4:28 am - Possible CITT Tariff Resolution Tomorrow

Posted by Editor on 05/1/06

Possible CITT Tariff Resolution Tomorrow

On Friday (April 28th), an exchange took place in the House of Commons during Question Period. According to Hansard:

Mr. Robert Vincent (Shefford, BQ): Mr. Speaker, last February, I wrote to the finance minister to find out his position on the Canadian International Trade Tribunal's recent recommendation to impose a surtax on the growing number of cheap imported bicycles. The main manufacturers affected are located in Quebec, namely, Raleigh Canada Ltd. in Waterloo, in my riding, and Groupe Procycle Inc. in Saint-Georges-de-Beauce, in the riding of the current industry minister.

Does the Minister of Finance intend to enforce the tribunal's decision and support the Quebec and Canadian bicycle industry?

Ms. Diane Ablonczy (Parliamentary Secretary to the Minister of Finance, CPC): Mr. Speaker, the member knows that the minister is well aware of this issue and I urge him to wait for the budget to see how it is dealt with.

Mr. Robert Vincent (Shefford, BQ): Mr. Speaker, is the government going to subject the bicycle industry to the same fate as the softwood lumber industry, and by that I mean will it do nothing until the industry is forced to throw in the towel at the last minute? What will it take for him to do something?

Ms. Diane Ablonczy (Parliamentary Secretary to the Minister of Finance, CPC): Mr. Speaker, the member will find that all will become clear next week. I urge him to be patient and wait for the budget.

The answer "all will become clear" suggests that the government intends to address the proposed 30% tariff on bikes below FOB $225 Canadian in the budget which will be presented tomorrow.

The Canadian International Trade Tribunal (CITT) recommended last September that domestic manufacturers receive protection from imports for a three year period for bicycles retailing below $400 Canadian. The CITT suggested that an FOB price of $225 would meet this threshold, however, members of the IBD (Independent Bicycle Dealer) channel (including BTAC - Bicycle Trade Association of Canada) believe that specialty bicycle manufacturers and importers will feel the impact on bicycles retailing for up to $700 (or more).

The government has thus far avoided commenting on the issue, although prior to the election the Conservative stance was against tariffs. Since the election, the government has been more evasive on whether they will implement the recommendations.

Tomorrow's budget could see the tariffs implemented (in whole or reduced form), or money funneled towards domestic manufacturers (Procycle and Raleigh Canada), to assist them in becoming more competitive.